PISM Policy Paper no 14 (97): Inflation is Dead, but Not German Angst: How the Monetary Policy of the ECB Undermines the Culture of Stability

The recent expansionary course of the European Central Bank confuses Germany. Getting the southern members of the eurozone out of recession is important, but the price could be damage to domestic savings, fading enthusiasm for reforms in the eurozone and more lax approaches to inflation in the future. In addition, the anti-deflationary bias in the eurozone can mark a point from which the traditional German macroeconomic preferences stop pushing themselves forward. Berlin needs allies to defend those preferences and Poland seems to be among them.

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